Guess' Inc. (NYSE:GES) Q4 2016 Earnings Conference Call - Final Transcript

Mar 16, 2016 • 04:45 pm ET


Guess' Inc. (NYSE:GES) Q4 2016 Earnings Conference Call - Final Transcript


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Good day, everyone, and welcome to the Guess? Fourth Quarter Fiscal 2016 Earnings Conference Call. On the call are Victor Herrero, Chief Executive Officer; Michael Relich, Chief Operating Officer; and Sandeep Reddy, Chief Financial Officer.

During today's call, the company will be making forward-looking statements, including comments regarding future plans, strategic initiatives, capital allocation, and short-term and long-term financial outlook. The company's actual results may differ materially from current expectations, based on risk factors included in today's press release and the company's quarterly and annual reports filed with the SEC.

Now, I'd like to turn the call over to Victor Herrero.

Victor Herrero

Good afternoon. And thank you for joining us.

As you saw in our fourth quarter's earnings release today, earnings per share was within the range of our guidance, while operating profit and margin finished near the low-end of our guidance. Sandeep will talk more about the quarter and full-year results later in the call. But before he does, I would like to update you on our progress on our five strategic initiatives, as well as to share with you the financial outlook over the next three years that should result from the successful execution of these initiatives.

The first initiative is to elevate the quality of our sales and merchandising organization. You might recall that on my first earnings call, I stated that our emphasis will be on consistently achieving positive comps quarter after quarters. And while we still have more work to do, I am pleased to report that we have made significant progress on this front. During this quarter, in constant currency, we delivered positive comps in Americas Retail, in Europe, and in Mainland China. These results are partly attributable to the initiative that we put in place, which I outlined in detail to you on my first earnings call.

The second initiative is to build a major business in Asia. China will be our biggest source of growth in the region, where we will more than double our -- the number of stores. Over the past few months, I made multiple visits to China and I witnessed first-hand the strong traffic and conversion that we have experienced in our newly opened stores, as well as the improving performance of our existing stores. I'm truly excited by our growth potential in China, as I believe we are significantly underpenetrated there relative to the white space that exist for our brand.

Our third initiative is to reinforce a strong culture of purpose and accountability throughout the organization. On our last earnings call, we discussed our focus on execution. This relentless focus on execution is key contributing factor to the strong comp results that we have experienced in the fourth quarter. And to further reinforce our culture of accountability, I'm in the process of designing a long-term stock bonus plan for the management of our company in order to more directly link rewards with performance. A direct link between rewards and performance is very important to me.

Our fourth initiative